Crypto stakeholders got exactly what they wanted with Donald Trump’s election victory. The price of Bitcoin is at an all-time high of over $85,000. Trump positioned himself as an advocate for crypto and promised regulatory reforms. I expect the sector to rise further. While I’m sure Bitcoin and many other cryptocurrencies will benefit from this, as many tokens tend to move in parallel, my number 1 cryptocurrency to buy after Trump’s victory isn’t Bitcoin.
Although Bitcoin has almost doubled this year, the price of XRP (CRYPTO:XRP) is down about 2%. Ripple Labs founders Brad Garlinghouse and Chris Larsen created XRP in 2012. Originally, the main use case of Ripple and
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However, XRP has struggled since it became the target of a lawsuit against the Securities and Exchange Commission (SEC). The SEC sued Ripple, Garlinghouse, and Larsen, claiming they sold XRP as an unregistered security in 2012. Crypto stakeholders and industry watchers have been keeping a close eye on the case because it had ramifications over how much authority the SEC would have to regulate cryptocurrencies as securities. Ripple and its founders won the case, but the SEC has appealed parts of the court decision.
Trump has vowed to try to fire SEC Chairman Gary Gensler “on day one” if he is elected. Gensler led the charge in the Ripple lawsuit, and many see him as a roadblock to crypto’s progress. As the face of this important and lengthy lawsuit, XRP should benefit from Gensler’s removal, which seems increasingly likely.
Gensler also instituted Staff Accounting Bulletin (SAB) 121, which requires banks to treat crypto assets they hold in custody for customers as liabilities on the balance sheet. This has effectively deterred many banks from offering crypto services, as they would have higher capital and liquidity requirements and would likely be subject to greater regulatory scrutiny. Repealing the regulations in SAB-121 could increase the number of financial institutions willing to protect crypto assets.
It’s also possible that a more crypto-friendly administration could pave the way for the debut of spot XRP exchange-traded funds (ETFs). In early 2024, Bitcoin spot ETFs were approved after a lengthy application and approval process. Such funds buy and hold Bitcoin and then issue shares based on the number of Bitcoins they hold. Bitcoin ETFs are easier for investors to purchase than Bitcoin itself, increasing access to the assets. They have also increased demand for Bitcoin because they have to buy and hold Bitcoin when investors add money to the ETFs. Ethereum ETFs followed the Bitcoin funds to approval, and some entities have already filed applications for spot XRP ETFs. Ripple Chief Executive Officer Garlinghouse has previously said that a spot XRP ETF is “inevitable.”
